The Securities and Exchange Commission (SEC) has issued a new directive to the capital market in line with its efforts to strengthen adherence to Guidelines on Anti-Money Laundering/Combating the Finance of Terrorism (AML/CFT).

With the new directive based on the AML/CFT guidelines, the Commission is requiring that all market operators submit twice every year reports of all activities in relation to anti-money laundering compliance on the capital market.

“Henceforth, this exercise will be repeated at the end of every six months and the returns submitted to the Commission latest by 31st July in the year and 31st January in the following year,” the Regulator said in its new directive.

According to the Securities and Exchange Commission, non compliance of the above directives will spell punitive damages.

“Failure to comply with the above directive shall attract the enforcement of the provisions of section 209(4) of Act 929, which gives the Commission the power to impose an administrative penalty of five hundred penalty units; or any other penalty deem fit by the Commission based on Act 929.”
SEC

SEC highlighted the requirements of the fund managers in the new directive in consonance with what was proposed by the European Commission.

“Section 138 of the Securities Industry Act, 2016 (Act 929) requires that a broker-dealer, a fund manager and any other licensed person shall ensure that it operates in a manner that will ensure compliance with the provisions of the Anti-Money Laundering Act, 2008(Act 749) as amended, the Anti-Terrorism Act, 2008(Act 762) as amended and the Regulations made under these enactments.”
SEC

Background of the Directive

It can be recalled that in May 2020, the European Commission proposed to the European Union Parliament to add Ghana to its list of high risk third countries with strategic deficiencies in their Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regimes.

However, in response, government through the Finance Ministry indicated that the European Commission’s proposal to include Ghana in their list of jurisdictions with strategic deficiencies did not reflect the current status of Ghana’s AML/CFT regime.

The Ministry in response, indicated the EU’s blanket decision to include all countries on the Financial Action Task Force (FATF) list irrespective of the progress made is unfortunate.

“The Government was always ready to engage with the Commission about the true status of the country’s AML/CFT regime and efforts being made to strengthen same,” said the Ministry.

“Ghana has an enviable reputation as a ‘Pillar of Stability’ in Africa and we are committed to ensuring that Ghana becomes the most attractive Africa destination for investment,” the Ministry asserted.

According to the IMF, effective anti-money laundering and combating the financing of terrorism regimes are essential to protect the integrity of markets and of the global financial framework as they help mitigate the factors that facilitate financial abuse.

Money laundering requires an underlying, primary, profit-making crime (such as corruption, drug trafficking, market manipulation, fraud, tax evasion), along with the intent to conceal the proceeds of the crime or to further the criminal enterprise.

The new directive will further enhance and strengthen Ghana’s financial market.